New Policy to Liberalize Foreign Exchange Market
The Central Bank of Nigeria (CBN) announced on January 31 that it has removed caps on naira payout rates for international money transfer operators (IMTOs). This policy change is part of the CBN's efforts to further liberalize the foreign exchange market and allow for more flexibility in exchange rates.
Previous Restrictions on IMTOs
Prior to this change, IMTOs were required to quote rates that did not exceed the previous day's exchange rate by more than 2.5%. However, with the new policy adjustment, IMTOs are now allowed to provide naira payout rates based on the prevailing exchange rate.
Impact on Naira's Value
The CBN's decision to remove the caps on naira exchange rates comes at a time when there are ongoing discussions about the stability and value of the naira in the official foreign exchange market. The previous restrictions were meant to mitigate the risk of rapid depreciation of the naira but instead led to an increase in dollar inflows on the parallel market.
Widening Gap between Parallel and Official Exchange Rates
As a result of the previous restrictions, the gap between the naira's parallel market exchange rate and the official market exchange rate has widened. In late January, the naira reached a new low against the dollar and has continued to lose ground since then.
Positive Results from Policy Shift
However, the recent policy shift to remove the caps on naira payout rates seems to be yielding positive results. On February 1, the naira recorded a more than 8% gain against the dollar. Analysts believe that this surge may be directly correlated to the removal of the allowable limit by the central bank.
Additionally, there have been reports that licensed foreign exchange dealers were planning to cease operations, which could have further impacted the naira's value. The marginal recovery of the naira against the dollar provides some relief amidst these concerns.
What are your thoughts on the removal of caps on naira payout rates by the Central Bank of Nigeria? Let us know in the comments section below.
Frequently Asked Questions
What are the advantages of a gold IRA
The best way to invest money for retirement is by putting it into an Individual Retirement Account (IRA). You can withdraw it at any time, but it is tax-deferred. You control how much you take each year. There are many types to choose from when it comes to IRAs. Some are more suitable for students who wish to save money for college. Some are for investors who seek higher returns. Roth IRAs let individuals contribute after age 591/2 and pay tax on any earnings at retirement. But once they start withdrawing funds, those earnings aren't taxed again. This account is a good option if you plan to retire early.
Because you can invest money in many asset classes, a gold IRA works similarly to other IRAs. Unlike a regular IRA which requires taxes to be paid on gains as you wait to withdraw them, a IRA with gold allows you to invest in multiple asset classes. For people who would rather invest than spend their money, gold IRA accounts are a good option.
You can also enjoy automatic withdrawals, which is another benefit of owning your gold through an IRA. This means that you don't need to worry about making monthly deposits. Direct debits could be set up to ensure you don't miss a single payment.
Finally, gold is one of the safest investment choices available today. Because it's not tied to any particular country, its value tends to remain steady. Even during economic turmoil the gold price tends to remain fairly stable. As a result, it's often considered a good choice when protecting your savings from inflation.
What are the fees for an IRA that holds gold?
Six dollars per month is the fee for an Individual Retirement Account (IRA). This fee covers account maintenance fees, as well any investment costs that may be associated with your investments.
You may have to pay additional fees if you want to diversify your portfolio. These fees can vary depending on which type of IRA account you choose. Some companies offer checking accounts for free, while others charge monthly fees for IRA account.
In addition, most providers charge annual management fees. These fees can range from 0% up to 1%. The average rate is.25% per year. However, these rates are typically waived if you use a broker like TD Ameritrade.
Do You Need to Open a Precious Metal IRA
Precious metals are not insured. This is the most important fact to know before you open an IRA account. If you lose money in your investment, nothing can be done to recover it. This includes any loss of investments from theft, fire, flood or other circumstances.
This type of loss can be avoided by investing in physical silver and gold coins. These items have been around for thousands of years and represent real value that cannot be lost. They are likely to fetch more today than the price you paid for them in their original form.
If you decide to open an IRA account, choose a reputable company that offers competitive rates and products. Consider using a third-party custody company to keep your assets safe and allow you to access them at any time.
When you open an account, keep in mind that you won't receive any returns until your retirement. Don't forget the future!
Is the government allowed to take your gold
You own your gold and therefore the government cannot seize it. It is yours because you worked hard for it. It belongs to your. There may be exceptions to this rule. You could lose your gold if convicted of fraud against a federal government agency. Also, if you owe taxes to the IRS, you can lose your precious metals. However, even if taxes are not paid, gold is still your property.
What is the best way to hold physical gold?
Not just paper money or coins, gold is money. Gold is an asset people have used for thousands years as a place to store value and protect their wealth from economic uncertainty and inflation. Investors use gold today as part of their diversified portfolio, because it tends to perform better in times of financial turmoil.
Many Americans now invest in precious metals. Although owning gold does not guarantee that you will make money investing in it, there are many reasons to consider adding gold into your retirement portfolio.
One reason is that gold historically performs better than other assets during financial panics. Between August 2011 and early 2013 gold prices soared nearly 100 percent, while the S&P 500 plunged 21 percent. During those turbulent market conditions, gold was among the few assets that outperformed stocks.
Another benefit to investing in gold? It has virtually zero counterparty exposure. If your stock portfolio goes down, you still own your shares. But if you own gold, its value will increase even if the company you invested in defaults on its debt.
Finally, gold provides liquidity. This means you can easily sell your gold any time, unlike other investments. The liquidity of gold makes it a good investment. This allows one to take advantage short-term fluctuations within the gold price.
Statistics
- The price of gold jumped 131 percent from late 2007 to September 2011, when it hit a high of $1,921 an ounce, according to the World Gold Council. (aarp.org)
- This is a 15% margin that has shown no stable direction of growth but fluctuates seemingly at random. (smartasset.com)
- If you take distributions before hitting 59.5, you'll owe a 10% penalty on the amount withdrawn. (lendedu.com)
- Instead, the economy improved, stocks rebounded, and gold plunged, losing 28 percent of its value in 2013. (aarp.org)
- If you accidentally make an improper transaction, the IRS will disallow it and count it as a withdrawal, so you would owe income tax on the item's value and, if you are younger than 59 ½, an additional 10% early withdrawal penalty. (forbes.com)
External Links
wsj.com
- Saddam Hussein's Invasion Helped Uncage a Bear In 1990 – WSJ
- Are you interested in keeping gold in your IRA at-home? It's Not Exactly Legal – WSJ
investopedia.com
- Do You Need a Gold IRA to Get Retirement?
- What are the Options? Types, Spreads, Example, and Risk Metrics
law.cornell.edu
- 7 U.S. Code SS7 – Designation Boards of Trade as Contract Markets
- 26 U.S. Code SS 408 – Individual retirement account
bbb.org
How To
The best place online to buy silver and gold
You must first understand the workings of gold before you can purchase it. Gold is a precious metal similar to platinum. Because of its resistance to corrosion and durability, it is very rare. It is very difficult to use and most people prefer to purchase jewelry made of it over actual bars of Gold.
Two types of gold coins are available today: the legal tender type and the bullion type. Legal tender coins are those that are intended for circulation in a country. They typically have denominations of $1, $5 or $10.
Bullion coins are minted for investment purposes only, and their values increase over time due to inflation.
They can't be exchanged in currency exchange systems. If a person purchases $100 worth of gold, 100 grams of the gold will be given to him/her. The $100 value is $100. Every dollar spent on gold purchases, the buyer receives one gram of gold.
When looking to buy precious metals, the next thing you should be aware of is where it can be purchased. There are many options for buying gold directly from dealers. You can start by visiting your local coin shop. Another option is to go through a reputable site like eBay. You might also consider buying gold from an online private seller.
Individuals who sell gold at wholesale and retail prices are called private sellers. Private sellers charge a 10% to 15% commission per transaction. This means that you will get less back from a private seller than if you sell it through a coin shop or on eBay. This is a great option for gold investing because you have more control over the item’s price.
The other option is to purchase physical gold. Physical gold is much easier to store than paper certificates, but you still have to worry about storing it safely. You need to make sure that your physical gold is safe by storing it in an impenetrable container like a vault or safety depositbox.
If you are looking to purchase gold on your own, you have two options: a bank or an pawnshop. A bank can provide you with a loan to cover the amount you wish to invest in gold. Small establishments that allow customers to borrow money for items they have brought are called pawnshops. Banks often charge higher interest rates then pawnshops.
Finally, another way to buy gold is to simply ask someone else to do it! Selling gold is simple too. It is easy to sell gold by contacting a company like GoldMoney.com. You can create a simple account immediately and begin receiving payments.
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By: Terence Zimwara
Title: The Central Bank of Nigeria Removes Caps on Naira Payout Rates
Sourced From: news.bitcoin.com/nigeria-forex-crisis-central-bank-removes-cap-on-exchange-rate-for-international-money-transfer-operators/
Published Date: Sun, 04 Feb 2024 09:30:29 +0000
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